Drawing Layer

Drawings are not placed on the document like text is but instead are placed in a drawing layer.
The drawing layer is them superimposed on top of the document.
The places where the drawing layer is attached to the document are called anchors.

The term anchor is a little misleading especially as the anchors actually "Float" over your document.
When you insert a new drawing object by using the Drawing toolbar
The anchor is associated with a particular paragraph. Move the paragraph and the anchor and drawing moves with it.

Snap to connectors ??
You can always group different drawing objects together so you can move them around as a single item.

In Word there are 2 types of graphics
1) Pictures - created from another file, bitmaps etc
2) Drawing Objects - include autoshapes, diagrams, wordart

3 Different Layers

Drawing Layer
Main Text Layer
Drawing Layer

In Line with Text

When you paste objects and the layout is "in line with text" these are inserted into the main text layer

Behind Text

When a layout is "behind text" it is in the drawing layer behind the main text layer
SS

In Front of Text

When a layout is "in front of text" it is in the drawing layer on top of the main text layer.
SS

Floating Pictures

When Word says that a picture is floating it means that the picture is being put in the drawing layer, instead of being put in the actual document with the text.

Things in the Drawing Layer are Ignored

The following will be ignored if they are placed in the drawing layer.
Table of Contents entries.
Figures cannot be cross referenced.
Index entries will not appear in the Index

Are headers and footers placed in the drawing layer - which is why field coded are not automatically updated ??